20% FCF Yield for 0.8x TBV
Includes a durable business with hidden assets and a activist-friendly ownership structure.
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Today’s business is pretty compelling.
It’s cheap to both assets and earnings.
In fact:
We are acquiring the company at an 18% discount to its tangible liquidation value, while getting an operating business with a 20% FCF yield, for free.
Here are the valuation ratios:
NCAV Ratio = 1.3
TBV Ratio = 0.8
EV/FCF Ratio = 4.7
P/FCF Ratio = 4.9
The business itself is in a competitive industry, but they have carved out a very durable business model, built to thrive in that environment.
On top of all this, the core segments are growing strongly and we get paid a dividend while we hold the stock.
Let’s take a look…